From Startup to $10 Billion Sensation: The e.l.f. Cosmetics Story

Alan Shamah is the founder of e.l.f. Cosmetics, an innovative cosmetics brand worth over $12 billion at its peak.

In this episode, Alan tells about his childhood, which was interrupted as his father passed away and Alan had to join the family business at a young age.

Alan reveals the mental and physical difficulties he faced throughout his time in business and tells the story of how e.l.f. was conceived. He touches on his experience selling a stake of his company to private equity and shares his advice to young adults looking to put themselves ahead.

Enjoy!

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Transcript:

Victor M. Braca: Hi everyone, welcome back to Momentum, the podcast where we sit down with interesting and successful community members in order to have conversations that will inspire and empower the next generation of our community’s leaders. I’m your host, Victor M. Braca, and this week I had the privilege of sitting down with Alan Shamah. Alan worked at his family apparel company for 30 years and then ended that company to start e.l.f. Cosmetics with his son, Joey. Alan and Joey had a successful exit, and the company is now worth $12 billion. Alan has a seat on the board of Yeshivah of Flatbush, he’s very involved with Chai Lifeline, the SCA, and many other community organizations. Listen to the full episode to hear Alan’s advice on following your passion, building a multi-billion dollar company with his son, and much more. Enjoy.

Victor M. Braca: Alan Shamah, thank you for coming on the podcast.

Alan Shamah: You’re welcome.

Victor M. Braca: I’m excited to have you. It’s going to be a good conversation. I know there’s a lot to learn from you in terms of business, community involvement, really everything. I want to start from the beginning. How did you get your start in business? Were you always entrepreneurial, were you always business-minded?

Alan Shamah: No, it all sort of happened in life over time. It all basically started when I was 16 and my father passed away, so I took his job in my uncle’s company. That’s when I started to really get involved in business, and it was a very long journey through that time. Then I went to work for another uncle. Through that, I had my own business for a short time. But I picked it all up basically not knowing anything, just trying to understand what I can do and how I could make it somewhat of a success. It was basically basic training, experience on hand in the job market, in the career market, learning and adapting and getting experience that way.

Victor M. Braca: Very cool. So you trained on the job pretty much.

Alan Shamah: Correct.

Victor M. Braca: Nice. So your first job, when you went to work for your uncle, what industry was that in?

Alan Shamah: It was in servicing. He serviced retail stores for supplies like paper bags and all different types of supplies that retail stores need.

Victor M. Braca: Got it. And did you rise up the ranks?

Alan Shamah: No, I did a very bad job. I was a terrible employee. It was my first real gig and I did not care for it.

Victor M. Braca: And you were 16?

Alan Shamah: I was, but it’s not an excuse. It was just not… I had none of the basic fundamentals that I developed later as far as a passion, a drive, and determination to make a success. All those I learned over time, and those were the factors that helped me become a success later in life.

Victor M. Braca: Got it. So all of the aspects of your experience that were business, you really learned by doing.

Alan Shamah: Correct.

Victor M. Braca: Very nice. So that was your first job. You didn’t really care for it, you didn’t love it so much, you were terrible. Your second job by your other uncle, tell me about that a little bit.

Alan Shamah: So that was the beginning of my real career. I was a salesman for basically a startup in the apparel business. My uncle had started this division with a couple of partners, and I worked for them. I was very driven. I really enjoyed it. I knew a lot from my previous experience as far as where to sell, who to sell, so I was able to really develop skills and become a major factor in their business. After a few years, I became a partner. It evolved to me owning the company 100% over time for many different reasons that would take forever to go through, but it was really a very great journey for me to learn a lot, to really develop who I am today, and to become a successful individual through it.

Victor M. Braca: Very cool. So that second job was sort of your start into the business world.

Alan Shamah: Correct.

Victor M. Braca: And you eventually went on to take over that company.

Alan Shamah: Correct. But it was a buyout a couple of times, and unfortunately, I bought my partnership with my partner. He soon passed away from cancer, so I bought his shares and then I had the whole company for myself.

Victor M. Braca: Got it. And obviously, you got pretty much all of your fundamental business experience while working there, but tell me a little bit more about that. What specific things did you learn at that company when you were working there?

Alan Shamah: In the early years, I really learned how business works. How to make a success out of something that’s developing, and really understanding a goal and how I was going to achieve the goal through hard work and really a passion for success. And that’s how I was able to succeed.

Victor M. Braca: Very cool. Nice. Yeah, I like the idea of you joining the company not necessarily by choice—it was your first real job—and you were put into it, and you ended up rising the ranks and taking it over. That’s very cool. So after that, what are things looking like for you?

Alan Shamah: So the company was doing well. I was running it, I had offices in the Far East, my own offices, and in Turkey. We really were doing a lot of private label business with Target, and it was pretty much growing. It was very successful. And then Target changed. That was most of my business.

Victor M. Braca: Target was your main client.

Alan Shamah: Right. And it got a little difficult because they had these different initiatives that were difficult to really do with the profit. So my son had joined my company, and we developed a cosmetic company called e.l.f. It really had a different strategy that he was interested in, so I decided that we would do it. I was still running my sportswear company, and things just were… I saw the writing on the wall with the sportswear company. Although e.l.f. was a very, very small business, tiny, and I didn’t really see the future in that either.

It was a very difficult time in my career, but I decided to close my Justin Allen apparel company and see what I was going to do. I really didn’t have the vision that e.l.f. was going to become the $12 billion company it is today. Wow. But that’s because we were able to really understand what I call the key to a successful business: to be able to pivot. Through growing the business and seeing different ways and different opportunities, my son added a lot of his education through his college. He went to NYU Stern. He brought a lot to the table in respect to how businesses need to be run in this day and age, and we really were able to revolutionize the cosmetic business and really grow something from nothing and keep moving and keep changing to become what the company is today.

It’s still a tremendous company. It’s really the foundation we built, and it’s still working off the foundation. Not to say that they’ve done a lot with social media and advertising and marketing and all things that we did not do, but the basic fundamental of business is really what we’ve created from the very beginning.

Victor M. Braca: I love it. I also want to hone in especially on when you were in the apparel industry. We’re going to get to e.l.f., that’s a whole another podcast episode in and of itself. But so when you were still in the apparel industry, you were in the industry for a while.

Alan Shamah: Sure, 30 years.

Victor M. Braca: That’s pretty much your entire middle age, right?

Alan Shamah: Correct.

Victor M. Braca: So you raised your kids while you were working in that industry, and that was comfortable and safe for you. How was the transition from closing that down? That must have been a little nerve-wracking.

Alan Shamah: It was a very difficult time in my life. I’ve had a few challenges, physical and financial. This was definitely top of the list probably. It took I would say a couple of years of a lot of sleepless nights not knowing what I was going to do or how I was going to do it. I really had a lot of… I went through different opportunities that were out there that I may exercise. Working for people, being a salesman, all different avenues that I was really very, very seriously thinking of pursuing.

Victor M. Braca: How old are you at this point?

Alan Shamah: 40s, 50.

Victor M. Braca: So that’s got to be nerve-wracking, you know, at that point.

Alan Shamah: Maybe, yeah, I would say 50.

Victor M. Braca: Got it. Did you still have kids in school at that point?

Alan Shamah: Yes, yes.

Victor M. Braca: That’s difficult, you know, ending the company you’ve been working on for 30 years, closing that down.

Alan Shamah: It was a very difficult decision to make. I really saw the writing on the wall. I don’t think many people would have made that decision. It was still making money, it was still surviving, but I saw that without my overhead and with the amount of volume that I needed to do to cover all the different elements, I saw that within a year or two based on the track that it was on, it was inevitable. So I did it before it had to be done. Which was very nervy because I didn’t have anything to go to, but I saw that it was inevitable and I was keen enough to realize that it was the right move.

Victor M. Braca: Right. So you took that leap, you took that risk in closing that down. And then between closing that apparel company down and e.l.f. starting to pick up, how much time was there in between those?

Alan Shamah: I would say at least a year, maybe two.

Victor M. Braca: So it’s a year or two of sort of you know, you’re in this little bit of a limbo, right, in between positions, in between companies. And how are you feeling at that point?

Alan Shamah: It was a lot of anxiety and it was just… you’d wake up in the middle of most nights, you’d go to sleep, wake up soaked in sweat from the anxiety that was going through your mind. It was a very difficult time, but I could tell you every difficult challenge that I had, I learned a tremendous lesson, and to this day those lessons are what runs my life.

Victor M. Braca: What are some of the lessons you learned during that period that dictate how you carry yourself, how you control your business now?

Alan Shamah: In hindsight of that particular time, it’s really having confidence in your ability. If you have self-confidence, I knew that it would be a setback, but I felt I had the ability. Whatever I was going to do and work for whoever I was going to work for, or whatever opportunity was going to be in front of me, I was going to be passionate about it. I was going to put my heart and soul in it, and I knew that I could make a success. I had the confidence. Although the business basically, you could say that it failed—it didn’t actually ever fail, but it was on that track—I recognized the fact that I still had what it took to make a success. I could have possibly turned it around. There were different avenues I was looking at: branding, licenses, which I actually took, and then I said, you know, I’m really done with this industry. I’d like to find something new. And I had the confidence in my own ability to make a success, not knowing what e.l.f. was going to become, but just in the ability of whatever road I decided to take.

Victor M. Braca: Right, you had that self-confidence even though the business was so to speak on a decline. You looked back and you realized that you really built it up for the three decades, and if you really put in the effort you would have been able to keep it going, but you decided it’s time to move on, basically.

Alan Shamah: Yes. I mean, it wasn’t as simple as it sounds.

Victor M. Braca: It was a very traumatic 20-second summary, right, right.

Alan Shamah: It was a very difficult decision to make, but that’s the one I wanted to make, and I made it because it was the right thing.

Victor M. Braca: So you team up with your son, so to speak. Joey is in NYU at this point?

Alan Shamah: No, he’s actually graduated and we’re working together when that whole transpired.

Victor M. Braca: Got it. Okay, so this whole thing transpires and Joey graduated college, you guys are working together. And how does e.l.f. come to be?

Alan Shamah: A gentleman came to us, this guy who had a concept strategy for the cosmetic world, and we sort of said, “Okay, it makes sense, it sounds good.” I’m not going to get into the strategy, it’s quite lengthy, but so we decided to start with it and go with it while I was still running my apparel business. So Joey headed that, and it was again, we hit a lot of roadblocks. It didn’t look like it was going to ever become anything.

Victor M. Braca: But you kept going.

Alan Shamah: Well, we were still in it, but we weren’t that confident that we had the right formula. And that’s when we realized, and a very good lesson also is that in any business that you’re in, your plan always has to be flexible. You have to look at what’s out there and see what opportunities will bring and what opportunities do not become reality, and pivot so that you can move and groove to make something out of nothing. And if you’re not going to be that flexible or that understanding that things change or not everything works out to where you planned it, then it’s going to be hard for you to be successful. I’ve used that strategy with our current cosmetic business that’s very successful, with all our businesses. See where we’re going and decide where it’s going to take us and go along for the ride and do it with success.

Victor M. Braca: For sure. No, it sounds like you guys were very intentional about the actions you took and the strategy that you laid out.

Alan Shamah: Not always intentional. We recognized opportunities for sure and we decided to take them and make them work, but we kept changing. And sometimes we had to change in order to make it the right way. It wasn’t always the way that you had envisioned it or how you planned it.

Victor M. Braca: Like you said, pivoting. So somebody approached you with a concept for the cosmetic industry, and were you guys in right off the bat?

Alan Shamah: Well, we talked about it, it made sense, and we decided to try it. And again, it went through a lot of changes and developing and process and roadblocks at the very beginning. And it had a lot of challenges that we had to overcome and keep moving it until it got to its sweet spot.

Victor M. Braca: Okay, so tell me a little bit about growth at e.l.f. Tell me some stories or just tell me a little bit about your experience working with your son.

Alan Shamah: It’s a very… you know, we definitely complement each other. It’s not always a piece of cake, but it’s something that I am very thankful for. I hope that everyone could have that experience because you really spend a lot of time at work obviously, and to do it with your son, it’s really a gift for sure. My other son became a doctor and my daughter’s a teacher, so they weren’t in the business world, so they did not come into the businesses. But it was a great experience. It continues to be a great experience, and I’m very thankful, like I said, for that time.

We had a lot of yin and yang, strengths and weaknesses. He brought the new way to do business based on his education: website, media, PR. I knew that at the end of the day, we have to make money, margins. So the two complemented each other through the growth of e.l.f. And then he brought to the table something that I had no knowledge of when it came to as we grew exponentially. We started entertaining selling part of the company to private equity, which was a great way to take some money off the table. It wasn’t anything that… there were a lot of acquisitions that were being made, mostly strategic. Li & Fung was buying a lot of the apparel companies up for multiples, but mostly strategic companies. They were complimenting pajama companies. But this was a whole different venue. It was a private equity firm that was a whole different strategy that we learned a lot from, and then we ended up selling to another private equity firm.

Victor M. Braca: Interesting. So this is how long into the process of e.l.f.?

Alan Shamah: e.l.f. started 21 years ago. I would say I honestly am not good with dates.

Victor M. Braca: Yeah, so okay. Started 2003, 2004.

Alan Shamah: And I think we sold the first time maybe 2008. I’m not even sure.

Victor M. Braca: Okay, fine.

Alan Shamah: About two years and 18 months later, we sold most of the company to TPG, which was another private equity. They took out TSG, which was our minor partner, and they bought 80% or 70% of the company.

Victor M. Braca: Got it. So you mentioned earlier when you were talking about how you were working in the apparel industry, they had a pretty good relationship with Target. So did that play into growth at e.l.f.?

Alan Shamah: I would say no and yes. So we approached Target, and I knew how because of my experience and knowledge it helped, but they were not interested. Then we sort of created the business backward or differently. So we created a website, it became very successful, so that was our entree into retail. Instead of retail to D2C, it was D2C to retail, which today is the way it goes, but it wasn’t that then. So Target started small, we got some great opportunities, we’re able to build on it, and through my experience and knowledge of Target—not my relationships, but my understanding of how they do business—it was helping to know how to develop the business to become a very successful business with Target over a period of time.

Victor M. Braca: Got it. So it wasn’t like you said, it wasn’t just your relationship with Target, it was also what you learned about how they work and how the industry works from those decades of experience. You were doing mainly D2C, right? And at what point did you make that transition into retail with e.l.f.?

Alan Shamah: Over time, but the D2C became… we actually tried to do retail to a very limited success mostly small retailers. So we did a lot of press, we got a lot of editorials with magazines and also different websites. Glamour Magazine—the famous story. Glamour Magazine came over to Joey and said, “Okay, we’re going to put your lip gloss pen against Stila’s pen,” or whatever it was at the time, “but we have to put in the back who you sell to.” So Joey looked at me, I looked at him, I said, “Jack’s 99 Cent Store on 32nd Street? I don’t think that’s going to crack it.” Right?

So he came up with an idea: “What if we made our website, which we already created a D2C website, that could do commerce?” We did not have it. So when that started, we called Blue Switch, which was our web provider, and we said, “Can we turn it into a .com?” They said, “Sure.” So we turned it into a .com, called Glamour and said, “Yeah, they can buy it on http://www.elfcosmetics.com.” I said fine. So we put it in. The same week that the magazine hit the stands, we got a placement in Daily Candy. Daily Candy was a daily newsletter that went out on the internet to hundreds of thousands of subscribers. And what they did on their daily candy subscription is they told you about all different things, like different ways to do your hair, different places to buy certain products.

Victor M. Braca: It’s a cosmetics newsletter?

Alan Shamah: Not only cosmetics, it was a lifestyle.

Victor M. Braca: It was a lifestyle, right.

Alan Shamah: And one day that week they mentioned e.l.f. and they put our website, and we had like 300 orders.

Victor M. Braca: That was organic, meaning that you didn’t solicit that?

Alan Shamah: No. Well, we had a PR firm that solicited all different media venues, whether it was Daily Candy, whether magazine, whether it was newspaper, whether it was editorials on TV.

Victor M. Braca: And that gave you that boost.

Alan Shamah: Yes, that gave us an impetus to understand that there was a business here. And that sort of was the beginning, and then that led to developing the website successfully, which led us to retail.

Victor M. Braca: Got it. So you started in D2C, you had that sort of proof of concept with that mini explosion so to speak, with that publicity, and you went into retail. How was that transition? I’m sure you’re experienced in that, right?

Alan Shamah: I’m experienced, but this is a different animal. In apparel, every season is a new horizon, right? You have to show them your styles, you have to pitch them and you have to get some orders, and then the fall comes around, you got to do it all over again. This is a planogram business. It’s a whole different thing when you get to that level. We didn’t start in planograms with a lot of retailers, we started with opportunistic holiday packaging and things that we did. Then we developed and got some space on the wall, so to speak, and that you get every week your orders based on traffic and sales. So it’s a whole different way of doing business. You had to really adapt and learn how to plan, how to project purchasing. It was a whole different way from doing the apparel business.

Victor M. Braca: What’s a planogram?

Alan Shamah: A planogram is the wall when you go into a store and you go into Target and you go into the cosmetic department, you’ll see they’ll have e.l.f., Maybelline, CoverGirl. It’s a wall or gondola with product that is there year in and year out. I mean, they have seasonal and they have the basics, and that’s basically the way the floor is set.

Victor M. Braca: So you were used to the apparel industry.

Alan Shamah: Think of it a simple way: think of it as cereal in a supermarket, right? You go into a supermarket, you see Rice Krispies, Cheerios, it’s always there. So you walk into Target, you want to buy a Maybelline mascara, you go to the Maybelline sign, you see the mascara year in and year out. And then they’ll put their fashion colors and they’ll do some in and outs, but for the most part, a lot of it stays the same.

Victor M. Braca: So what are you up to right now?

Alan Shamah: So through that, there was again another downtime when I sold and was financially stable, but I’m a very active individual. I need to be motivated, I needed to do things. I had nothing really to do. I don’t love to travel as much. I like to travel, but not that much. And I like to have a really motivated life where you go to work and you achieve goals. So we got an opportunity to go into the fitness business with some of our associates. We have a yoga business and a small fitness business called Gaiam, SPRI, we have Reebok, we have licenses that’s pretty successful at the retail level. And then we ended up going back into the cosmetic business five years ago. We took on a partner, Victor and Ralph Azrak, and we’re now running both the fitness business, a headwear business, and a cosmetic business.

Victor M. Braca: Very nice, very cool.

Alan Shamah: But completely different than e.l.f. It’s a prestige business, totally different marketing, different product, different focus. Different. Again, pivoted a lot to make it where it is today and continually evolve it.

Victor M. Braca: For sure. Love it. So I know you’re very involved in community organizations, and I want to hear a little bit about that aspect. So shifting away from business for a second, why are you so involved?

Alan Shamah: Because I feel I am so committed to our community and the Jewish world and the world as a whole. I think everybody has an obligation to do something beyond their norm, or maybe that’s not the right way to put it. I think that we all have an obligation to get involved and find something that you can have a passion for. So I had a community in Manhattan Beach that I was very involved in. We grew the shul, we built the shul, the Manhattan Beach Sephardic shul. We were very, very successful. It was a great accomplishment. It took a lot of work from a lot of the core community people, the Laniados, the Mosseris, all the dedicated people. It was a very rewarding process. We built the community, and I think Manhattan Beach is a great place to live. I ended up moving out for whatever reasons, but that was my first involvement.

The second involvement was the Yeshivah of Flatbush. I would say again, I think that the members of our community have a lot to give back, and without them, all the beautiful and great organizations we have cannot be successful. Unfortunately, it’s the 80/20 rule: 20% of our community members get involved and do 80% of the work, which should not be, but it is. So I think that more people should understand that it’s the obligation to get involved in community. So one of them was Manhattan Beach, the other one was Yeshivah of Flatbush. I’m still a board member, I was the treasurer for six years, still very involved. I’m involved with the SCA. I’m involved with Chai Lifeline. Me and my friend Abe Mishan, along with a couple of guys, started a fundraiser event that’s going to happen in a couple of weeks called Bike4Chai. We started it 15 years ago. This year we started with 37 riders… wow… and we grew it from a $250,000 raise, it raised almost $14 million last year. Wow.

So those are the accomplishments that you can have if you put in your work, you put in your effort, and those are the things you’re going to be proud of. And not rely on other people, because you can’t rely on other people to do what you need to do. And Chai Lifeline is a great organization because I had cancer, I know it definitely. When the doctor walks into the office and tells you your child has cancer, the whole world blows up. Chai Lifeline puts it all together and gets you through it. All the organizations, SAFE, I mean I’m not involved in these, but everybody should be there for these organizations to be committed to them to make them successful. I mean, there’s a million of them. And the only reason why we’re such a great community is because we have enough people to make these organizations what they are. But if everyone sat back and sat home and let them do it, it’s the wrong attitude.

Victor M. Braca: I like that for sure. And staying on that topic of community for a second, how much do you attribute your success and your building up of your experience to our community’s network?

Alan Shamah: I think that the community, through my challenge of 16 and growing through it, has been a tremendous support system on every level. When you have a difficult time, you know the community is there for you, whether it’s there for medical when you’re suffering with cancer, or when you need help through Bikur Cholim, or Career Training, or whatever you need. Knowing that you have that at your fingertips so to speak, it gives you a way to build your confidence and go out and become a success. I think a lot of the successful business people in our community, I attribute it to the way the community runs and the way it’s there for you so you can build your own self-esteem.

Victor M. Braca: 100%. Yeah, 100%. So staying on that note of community and sticking into the community, when you were at your second job, working for your uncle, what are some things that you did back then that put you ahead and accelerated your progress to end up where you are today?

Alan Shamah: I cannot… there’s not one thing I could attribute.

Victor M. Braca: There’s never one thing, yeah.

Alan Shamah: It was just that as my passion was fueled and my determination had really come to the forefront and my understanding of what I wanted to become, I used my effort and my understanding and knowledge to be successful. I can’t really pinpoint one particular issue or thing. I just think that if there’s a will, there’s a way. That’s my motto, I always teach it to my children and my grandchildren. That’s what you have to do, you have to be determined and you’ve got to go out and get it done.

Victor M. Braca: I want you to tell me about a couple of setbacks, hardships you had during your career. It could be at e.l.f., it could be when you’re in the apparel industry, and it doesn’t have to be specific, but things you learned from them.

Alan Shamah: Look, one day I got up, we had a huge program at Target and we were doing it in Cambodia. July 3rd it was, and we had all the fabric in the factories, and they had a coup and everything got exploded. But Target could care less. These are all polar fleece. I had to figure out how to redo it, make it in Hong Kong, make it here, fly it in, lose money. But those are challenges that you have to figure out how to, like I said the word pivot, or get through the best you can make it and realize how it’s going to teach you a lesson going forward.

Victor M. Braca: What did you end up doing with the product?

Alan Shamah: I ended up getting whatever I can get and deliver what I could deliver. I got most of it and it definitely was a losing experience financially, but at least I supported the customer.

Victor M. Braca: And you ended up learning from that as well.

Alan Shamah: Exactly, I learned from it. I had cancer, I learned a tremendous lesson there. I had a very, very bad case of COVID, I got stronger from it. Every challenge or hurdle I have gotten through, I’ve been able to become a stronger individual from.

Victor M. Braca: And these health experiences that you’ve dealt with, how have they changed your outlook on money, success, life, your family?

Alan Shamah: Appreciation is the key word. I appreciate everything every day, every moment, everything I have. All the difficulties, they’re there to learn from and to give you appreciation when you get through them, or how they transition into a positive. So it’s all about appreciation, that’s the key in my life.

Victor M. Braca: I’m sure that comes out when you’re working in business as well.

Alan Shamah: I try to understand everybody that works with me and appreciate them for who they are and what they contribute, and respect and give them the understanding that I am with them and we’re working together, and appreciate what they bring to the table.

Victor M. Braca: For sure. So throughout your career, you have a ton of experience and you’ve worked with a lot of people. I want to ask you from a hiring standpoint, you’re looking at a potential job candidate, maybe a recent graduate of college, figure 22 years old. What can a person of that age have done to put themselves ahead, to stand out to you on a job application, in an interview, in order to get a job?

Alan Shamah: I look at the person’s personality and I want to see a fire in their ability to come across to me what they want to do and how they want to do it. So I try to give them examples of situations that they’re going to be in through their job that I’m interviewing and seeing how they react. I don’t expect the right answer because they’re learning. I expect that they can question my request and get some more information. Then I see them being very intuitive and understanding that they don’t have the answer, but they’re willing to learn and get the answer.

I always tell somebody, when you come to me with a problem, I want a solution. I want what you think we should do to get past this.

Victor M. Braca: I like that mindset.

Alan Shamah: And that’s what I look for when I’m interviewing people. People that can come to me with a solution to a challenge, or we’ll work together finding it, just not throwing it on my lap. Sometimes you pick people that you believe have that ability and they don’t. Sometimes you don’t hire people that have that ability because they don’t have the personality or the outwardness to do it. So it’s a challenge.

Victor M. Braca: For sure. It sounds like you guys are constantly iterating. You try things and you see what works and you go from there. You learn from those experiences.

Alan Shamah: You always have to learn and react.

Victor M. Braca: And a big aspect is learning on the job, I’m sure too, just like you did.

Alan Shamah: I am a very big advocate. I look at these very, very successful people, and everybody knows them, Steve Jobs, Bill Gates. You’re talking about people that are very, very successful, and I’m using the magnitude of there, but it’s a matter of learning and adapting and getting through it and getting to where you need to get to and figuring out how to do that. You can get a lot of tools through education, but when you’re on the job, experience is your real test to put those tools to work.

Victor M. Braca: For sure. So you were running a company for 30 years and then you sort of ended that and you went on to found another company right? On that note, what do you say to somebody who’s maybe a little late in life, relatively late business-wise, career-wise. High 30s, 40s, 50s, and they’ve been in a certain career for their entire working life, and they’re looking for a fresh start on an entrepreneurial level. What do you say to somebody like that who’s maybe scared to assume that risk?

Alan Shamah: I say to them that if it’s your passion, and it may not be what you really end up doing because we don’t know what road they’re going to take, my advice is to do it. Because if you don’t do it, you’re going to regret it. And I do believe that, I don’t care how old you are. I’m 69 years old. We started this new cosmetic business when I was 65 years old. Wow. So yes, I had a big tool chest, I was financially stable, so I had a lot of great things going for me, I don’t say no. But I am not afraid, and I’m hoping to do another business in my next decade. Age should not scare anybody. It’s the ability to understand and to have the passion and to really have the dedication to get it done. Things and challenges are going to be in front of you, and you got to work towards getting through those challenges. If you have that keen sense and you use your ability, you’ll be a success in anything you do at any age that you do it.

Victor M. Braca: I love it, yeah. And it sounds like you’re overall enjoying working, tremendously, and you’re finding fulfillment in it.

Alan Shamah: Huge, yeah.

Victor M. Braca: I love that. I can imagine you’re a big advocate of getting an early start, whether it be doing things to put yourself ahead in high school, or jumping around to different industries, different businesses, internships when you’re in high school, college in order to get a taste of what you might enjoy. And from there, once you start your working life, then you can already have that base, that experience to bounce off of, right?

Alan Shamah: So today’s landscape is completely different than when I started. There’s a whole different world of opportunities with technology and different ways to do marketing. So you really have to understand the landscape that you’re going to pick. That’s where education comes in. I wasn’t always a college education advocate, although my kids all went to college, and my son became a doctor. But when you want to decide your career, you really need to understand the landscape because it’s changed so much. When I was growing up, it was you go into your father’s business, you go in the apparel business or electronics business, retail, wholesale, those were the parameters. Those parameters don’t exist anymore. They’re still there, and there’s some very successful apparel companies, some successful retailers, but for the most part, the world is much bigger and it’s much more complex. You need to understand a lot of it, whichever track you take, and figure out how you can make a success through that track. It’s much more difficult.

Victor M. Braca: And you think that figuring that out, the best way to do that is through education?

Alan Shamah: I think education can… not the best way, experience is the best way, but education can give you the opportunity. Let’s say you pick finance. You’re not going to get a job at JP Morgan unless you have education. So if that’s your goal, then you got to take the right career move, which is get a great education, do very well in college, and then you can apply to a finance position that can give you the opportunity. Whether it’s the beginning of a financial career or not, it gives you that experience. If you want to do technology, again, you have to learn the techniques, the different ways. If you do marketing. So college could be one of those tools, but there’s other tools of experience that you may or may not need college for. It all depends on what you want to do.

Victor M. Braca: For sure. So going back to the entrepreneurial aspect of it, in sort of a lesson that you might have taken from the early days of e.l.f. You had built up those relationships from working in the apparel industry for a couple of decades, but besides for that, how did you stand out as a cosmetics company in the industry? There are a lot of cosmetics companies. How did you guys set yourselves apart?

Alan Shamah: So we really, it was really a transition on where we started to how we got where it is today, and it was really about pivoting again. I use that word over and over again. To seeing where there was opportunities in the landscape and not to go with the norm. So I used my apparel philosophy together with the cosmetic world of what it was, and I did not go along the cosmetic route. We went along the apparel route: fast turn, come to market. We had D2C so we didn’t need the retailers to reset. We used all those elements to become a new world cosmetic company, which today is the real norm, but at that time it wasn’t. So it’s really about understanding opportunity and making it happen.

Victor M. Braca: And it sounds like you had to act fairly quickly with these things, right? Tell me a little bit about that, because you came from the apparel industry.

Alan Shamah: The apparel industry was going through what they call quick turn. You shipped them a t-shirt in and it starts to sell, you got to get back into it. You got to have the sourcing capabilities to quick turn because everything was quick turn. So I took that philosophy to cosmetics. What’s happening out there? So one example was that bareMinerals was coming out or exploding with mineral makeup, whatever it happens to be, natural. And we decided that we wanted to get on the bandwagon for the value customer. Within two months we had a product, within four months we were selling it, and we used the apparel approach. You go to L’Oreal let’s say, their calendar is 24 to 36 months. They have an idea, it doesn’t come to market for three years. Maybe it’s changed now, but that was it then. Our philosophy: you have an idea, come to market in 3 months.

Victor M. Braca: What allowed you to be that way? Because I’m sure L’Oreal wants to be as quick.

Alan Shamah: No, they don’t. They just didn’t think that way. Now they do, right, back then it wasn’t part of their DNA.

Victor M. Braca: Interesting. Do you think it was because you guys were a newer, smaller, innovative company?

Alan Shamah: Yes, and we had resources that thought that way because we’re doing business mostly in China.

Victor M. Braca: Got it. I want to hear a little bit about what you learned from the private equity executives that were put in, because you had already been in business for 40 years, 35 years at that point, and you mentioned that you learned a lot. What specific things did you learn? Were there sort of business school type of things that you learned? I want to hear about that.

Alan Shamah: Okay, so we learned structure, where you have everything set in goals, and it changes, I don’t say no, but at least you have a plan going in. Talent was the second thing. The CEO right now of e.l.f. is an amazing… Tarang Amin is an amazing individual. He’s done things that… like for instance, he was in charge at one point for a charcoal… the main charcoal grill, forget the name of the brand, it’s the brand everyone uses. And he was involved and he was in the marketing, and he came up with an idea. How do you grow that business? He came up with an idea: the more places in the store that charcoal was displayed, the more business you were going to do. And it revolutionizes that business. He grew the business exponentially. He grew a lot of business, Bounty. This talent is really a key to success. So you got to recognize talent and structure and planning, and all those things that a lot of the companies today don’t necessarily have, in the smaller companies I should say.

Victor M. Braca: Got it. And that second larger PE buyout, you guys stayed at the company after that?

Alan Shamah: For two years.

Victor M. Braca: How was that experience? Because you go from owning the company essentially, right, to being owned and all of a sudden on salary. Like how does it work?

Alan Shamah: Well, yes you are, but we had equity. But it was really about… it wasn’t necessarily about that you were degraded. You were not degraded. They were very supportive of our input.

Victor M. Braca: I like that.

Alan Shamah: We were board members, we were very involved with the major decisions that were made. We respected them, they respected us. So it was about a team. They had a slogan: one dream, one team. We were part of that, and we didn’t feel at all demoralized or degraded. We felt like we were part of how we were going to grow the company and take it to the next level.

Victor M. Braca: That’s nice, that’s great. Yeah, it’s great to hear a positive story about that, you know, about how a PE buyout turned into good relationships and still today.

Alan Shamah: Yeah, that’s amazing. So they had a 20-year anniversary of e.l.f. where they rang the bell on the New York Stock Exchange again, that we went public four or five years ago. We were invited, we were treated as one of the owners or the founders. All his interviews, Tarang always touts the Shamahs, their philosophy, what they brought to the company. He wrote me an email, because I complimented on a quarter last quarter or the quarter before. He wrote me an email that the tree is only as strong as the roots, and the roots are something that you put in place. So it’s very rewarding when you see a company so successful.

Victor M. Braca: That’s very nice, yeah. And you guys are no longer involved directly with the company, right?

Alan Shamah: Not at all.

Victor M. Braca: Got it. But obviously you’re keeping up with it in the news, the stock price…

Alan Shamah: We are.

Victor M. Braca: You’re in the loop about that. Got it, cool. So I want to shift gears a little bit towards the younger generation. What do you say to somebody who just graduated college, who feels pressured to join, let’s say, the family business or a specific industry that they might not want to join because of the money?

Alan Shamah: I say don’t do it. Don’t do it. I was forced to do it when I was 16. I had my last semester of high school, I did it in high school, and it wasn’t my choice, it wasn’t my passion. I did not do it well, I got a bad reputation from it. It was really something that was a very good learning time for me, but I would not tell anyone to do something that they don’t have a fire in their belly for.

Victor M. Braca: Interesting.

Alan Shamah: You could take it, by the way, all right.

Victor M. Braca: Interesting, okay. I like that advice. It could be a little nerve-wracking for somebody who’s just beginning their working life to follow it, but I think it’s part of the entrepreneurial mindset. You take that risk and you chase what you want to do and you put your all into it.

Alan Shamah: Like you said, you have to have the confidence, the self-esteem, and the real passion for what you’re going to do. And understand that you’re going to go up against challenges and it’s not easy. There’s a great book that I think everybody should read, and I’m not a reader, but Malcolm Gladwell wrote a book called Outliers. It’s great, and it really teaches you that you think that The Beatles were a success… you know, The Beatles, and they weren’t. They spent many years in German pubs singing before they were able to become a success. Same thing with so many people that you think are overnight successes that have gone through a lot of trials and tribulations to become what they became. And that’s what gets you the strength. But you have to have the passion.

Victor M. Braca: I love it, yeah. The passion is a big thing and you could see that coming through from your working history. That’s amazing. So looking back at your entire career trajectory, what was your momentum moment? What was the moment where you saw what you were doing, how business was going, and you realized you were doing something right and you had to continue? You sort of realized that what you were doing caught on, it was building up momentum, and you were ready to scale it up.

Alan Shamah: So I’m going to go back to when I started with Paris Sportswear, Justin Allen, because that’s when I was lost. I really didn’t know what I wanted to do. I had a girlfriend, I wanted to get married, and I had no real clear path on how I was going to financially support myself. So I started working for them as a sales rep and selling from them, and using my understanding of the retail environment, local markets. I realized that if I put my mind to it and use my resources, what I know, I could become a successful salesman and make money. And that’s when I realized that you needed a goal, a passion, and getting success out of something you do made you feel good. And through that experience, I was able to use that throughout my career.

Victor M. Braca: I love that, yeah. And like you said, you took that lesson that you learned from that experience and that carried over I’m sure into e.l.f., into instilling your children and grandchildren with those values.

Alan Shamah: Yes. My philosophy is that you have to be very diligent, hardworking, use your passion, and drive yourself to become a success. You’re not going to wake up and it’s not going to be handed to you, because if it’s handed to you, which in certain cases it is, you don’t appreciate it. And if you’re not going to appreciate it, it’s hard to be a success at it.

Victor M. Braca: For sure. Looking back at your whole story, being put into work at a young age and getting the hang of it pretty quickly, rising up the ranks in that company, you ended up closing it down but you went on to found e.l.f. with your son. And even now, you guys are working on more brands. I’m sure there’s more that we can expect from you in the future.

Alan Shamah: Yes, we have a very successful couple of businesses that are growing exponentially. I love my partners. I have different sets of partners for different businesses, I have such respect for all of them. I’m involved on the level that I want to be. I think it’s a great place, and I’m using all my strategic experiences to grow and to be important to the businesses because of my experience.

Victor M. Braca: I love it. There’s really a lot to learn, so thank you for coming on. It’s been a pleasure and looking forward to keeping in touch.

Alan Shamah: Thank you for having me.

Victor M. Braca: All right, you made it to the end, which means you watched the entire thing all the way through. Thank you so much for watching, I really hope you enjoyed the conversation. We put out a new episode every week on Friday, so stay tuned for next week’s episode. We’ve done a bunch of episodes so far interviewing people who have started their own small businesses in the community, who have run their family’s businesses for a while, who have started their own companies in industries like food, real estate, wholesale, finance—we have it all. Please check out our other episodes, I’m sure you’re going to love them. Let me know what you thought about this episode, leave a comment, please text me, message on Instagram, I would love to hear from you. Please also make sure to like or follow us on Instagram, on Spotify, YouTube, wherever you’re watching or listening. Thank you so much. Until next time.